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BW Businessworld

Malaysia Airport Operator Exits Delhi International

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Malaysia Airport Holdings Bhd said it will sell its entire 10 per cent stake in Delhi International Airport for Rs 492 crore ($79 million).
MAHB said it was selling the stake because Indian law limiting foreign ownership of domestic companies to 49 per cent meant it could not exercise any control over the management of the company.
MAHB will sell its stake in the capital's airport to GMR Airports Ltd, a unit of India-listed GMR Infrastructure Ltd. The company will focus on investments that allow a "significant degree of control" in their operations.
The proposed disposal is expected to be completed in the second quarter of this year, the airport operator said in a filing to Bursa Malaysia.
The Malaysian entity, which made its first investment in Delhi International Airport (DIAL) in 2006, would be reaping a profit of nearly $22 million from the proposed sale.
MAHB had recently realigned its investment objectives to focus more on investments in companies where it can exercise a significant degree of control.
"As the existing shareholders agreement restricts foreign ownership in DIAL to not more than 49 per cent, MAHB is of the opinion that it would not be in a position to exert influence in DIAL unless it is able to own majority shareholdings in DIAL," the filing said.
For the transaction, Malaysia Airports (Mauritius), a wholly-owned subsidiary of MAHB, has entered into a conditional share sale agreement with GMR Airports.
Since April 10, 2006 till October 23, 2008, MAHB invested over $57.6 million by taking its total stake to 10 per cent in DIAL.
In case the offloading of 10 per cent stake is not completed before April 30, then the sale consideration could be revised, the filing noted.
The proposed sale is seen as a strategic opportunity to crystallise its investment after realising the value of the investment in DIAL, it added.
At present, GMR Airports has 54 per cent stake in DIAL while Airports Authority of India (AAI) has 26 per cent share.
Besides, Germany's Fraport AG Frankfurt Airport Services Worldwide holds 10 per cent.
This is the shareholding pattern as on March 10.
The government had handed over two airports - Delhi and Mumbai - to private players in 2006 under a joint venture.